Ch5 Marketing Research and Market Demand and Forecasting

7/29/2019 Ch5 Marketing Research and Market Demand and Forecasting

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Toward Marketing Planning:Marketing Research and Forecasting Demand

Chapter 3&4

Ch.3, p.108-113

Ch.4, p. 119-121; 136-138

Lecture 3 , Part 1


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Marketing Research: Tasks

1. To capture the marketing insights, provide diagnostic informationabout the marketplace.( pages 119-121).

2. to support The Marketing Plan Development

Analyzing the macro/microenvironment Forecasting and demand Measurement

Measuring Marketing Productivity.

3. To assess the efficiency and effectiveness of marketing activities :marketing metrics , marketingmix modeling and developingmarketing dashboards ( pages 136-138).


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Marketing Research Defined:

The systematic design, collection, analysis,

and reporting of data and findings relevant to

a specific marketing situation facing thecompany.

Budgeted at 1-2% of company sales In-house/ or subcontracted


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The Marketing Research Process: 11 Steps

Step One: Establishing the Need for MarketingResearch

Step Two: Defining the Problem Step Three: Establishing Research Objectives

Step Four: Determining Research Design

Step Five: Identifying Information Types and

Sources Step Six: Determining Methods of Accessing

Data


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The Marketing Research Process: 11 Steps

cont

Step Seven: Designing Data Collection Forms

Step Eight: Determining Sample Plan and Size Step Nine: Collecting Data

Step Ten: Analyzing Data

Step Eleven: Preparing and Presenting the Final

Research Report/ Recommendation


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The Marketing Research ProcessStep One: Establish the Need for Marketing Research

When Marketing Research is not needed

The information is already available Decisions need to be made now

We cant afford research

Costs outweigh the value of the research


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The Marketing Research ProcessStep Two: Define the Problem

The most important step in the marketingresearch process is defining the problem.

Not to be broad or narrow

Mkt Manger and the researcher agree on the

problem.


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The Marketing Research ProcessStep Three: Establish Research Objectives

What information is needed in order to solve theproblem?


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The Marketing Research ProcessStep Four: Determine Research Design/Plan

We need to make decisions about:

1.Research approaches: observational,ethnographic, focus group, survey,behavioral data (scanner, database), orexperimental (treatments).


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The Marketing Research ProcessStep Five: Identify Information Types and Sources

Secondary Data:information that has

been collected for some other purposeother than the research at hand.

Primary Data:information that has beengathered specifically for the research

objectives at hand.


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The Marketing Research ProcessStep Six: Determine Methods of Accessing Data

Secondary Data:accessing data through

sources such as governmental sources ,the Internet and library, syndicated bodies.

Primary Data:collecting data throughmethods such as telephone, mail, online,

and face-to-face (quantitative) andobservation studies and focus groups(qualitative).


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The Marketing Research ProcessStep Seven: Design Data Collection Forms

The design of the data collection form that isused to ask and record information in marketing

research projects is critical to the success of theproject. It is easy to write a set of questions butvery difficult to construct a questionnaire.

Questionnaires ( Scaled questionnaires)

Qualitative studies ( unstructured ) Technological Devices


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Instruments of collecting data: Scaledquestionnaires, non structured or qualitativemeasures ,technological devices .

galvanic skin response

pupil dilation

eye tracing/Brain waves


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The Marketing Research ProcessStep Eight: Determine Sample Plan and Size

Sample plan:refers to the process used to selectunits from the population to be included in the

sample Sample size:refers to determining how many

elements of the population should be included inthe sample

Contact method:Mail, Telephone, in person, oronline.


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The Marketing Research ProcessStep Nine: Collect Data

Data collection is very important because,

regardless of the data analysis methods used,data analysis cannot fix bad data. 12

Nonsampling errors may occur during data

collection. These are related to poor designand/or execution of the data gathering.

Sampling errors may occur based purely onchance


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The Marketing Research ProcessStep Ten: Analyze Data

Data analysis:involves entering data intocomputer files, inspecting data for errors, and

running tabulations and various statistical tests


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The Marketing Research ProcessStep Eleven: Prepare and Present the Final

Research Report/ and Make the decision

The last step is one of the most important phasesof marketing research.

Its importance cannot be overstated because it isthe report, or its presentation, that properlycommunicates the results to the client.


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References

ChapterFile Format: Microsoft Powerpoint 97 - View as HTML2. The Marketing. Research Process. The MarketingResearchProcess: 11 Steps. StepOne: Establishing the Need for MarketingResearch. ... The

MarketingResearch Process. ...homepages.wmich.edu/~lindquis/marketing%20research%20ppt/bbch2.ppt.ppt - Similar pages

Date : 12th, January 2004
http://homepages.wmich.edu/~lindquis/marketing%20research%20ppt/bbch2.ppt.ppthttp://66.102.7.104/search?q=cache:9dHb8AOudaIJ:homepages.wmich.edu/~lindquis/marketing%2520research%2520ppt/bbch2.ppt.ppt++%22marketing+research+%22+filetype:ppt&hl=en&lr=lang_en&ie=UTF-8http://www.google.com/search?hl=en&lr=lang_en&ie=UTF-8&oe=UTF-8&as_qdr=all&q=related:homepages.wmich.edu/~lindquis/marketing%2520research%2520ppt/bbch2.ppt.ppthttp://www.google.com/search?hl=en&lr=lang_en&ie=UTF-8&oe=UTF-8&as_qdr=all&q=related:homepages.wmich.edu/~lindquis/marketing%2520research%2520ppt/bbch2.ppt.ppthttp://66.102.7.104/search?q=cache:9dHb8AOudaIJ:homepages.wmich.edu/~lindquis/marketing%2520research%2520ppt/bbch2.ppt.ppt++%22marketing+research+%22+filetype:ppt&hl=en&lr=lang_en&ie=UTF-8http://homepages.wmich.edu/~lindquis/marketing%20research%20ppt/bbch2.ppt.ppt


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Measuring Marketing ProductivityPages136-138


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Marketing Metrics

A set of measures relative to marketingperformance.

Example of the matrix for a website:

1- Visitor number( measure exposure),2-Number of visits by individuals suggest loyalty ),

3-How deep into the site visitors go

4-How long visitors stay on the site,

5-Subscription numbers (express commitment tothe site)

6- promotions acted one.g. discount coupons

downloaded.


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Online sales matrix

1- sales volumeincome measure

2- Sales trend time of day/week/ month/year/

geographic

3- Average order size (bigger order values suggestcustomer satisfaction).

4- conversion rate ( sales per site visits) .


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Developing a Marketing Dashboards(Scorecard).

A system of identified objectives, target andindexes.

To monitor the marketing performance while

setting control.


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Forecasting and Demand Measurement


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Topics on this part:

Market Demand

Company Demand

Method of measuring Demand

Forecasting demand


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Why measuring and forecasting demand

Identifying market opportunities .

Measuring market size, growth and profitpotential of each market opportunity.

Selection of an opportunity that match theorganization resources or mission.

Sales forecast support allocating the resources

for purchasing, operation and marketing, forinstance.


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Market Demand Defined

"A market demand is the total volume of a product that

consumer would buy in a defined target segment ,

defined time, defined area, defined marketenvironment, and defined marketing program".


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Which market to measure? VocabulariesCase study: Motor Cycle Market

.

Market PotentialActual + Prospects

Available Market

Qualified Market Serviced Market(TMs)

PenetratedMarket

have Interest, Income and Access


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Market Potential

.

Mkt min

Mkt forecast

Mkt potential

Industry Marketing Expenditure

Market potential is the limit approached by market demand asindustry marketing expenditure approach infinity for a givenmarketing environment.


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Measuring Marketing Share ( Company demand)

Company demand is a function of the companymarketing effort under assumed marketingenvironment.

Company use this forecast for preparing amarketing plan and establishing the salesquotas and sales budget.

Absolute : measured as percentage of its salesexpressed as a percentage of total industrysales in unite sales or dollar sales) or relative.


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Methods of measuring demand

1-Total market Potential Measurement

Total market potential is the maximum amount ofsales that might be available to all the firms in an

industry during a given period ,under a givenlevel of industry marketing effort andenvironmental conditions.

Q= nqp

Q( Total Market Potential)

N( number of buyers)

Q( quantity purchase by average buyer)

P( price)


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Methods of measuring Company demand( Company Sales

Forecast)

Chain Ratio method ( Multiplicative Model)

It involves multiplying a base number by severaladjusting percentages .

Example :

Total estimated prospective buyers 1 million( Base Number)

Target market(25% of total buyers) x25%

Distribution /communication coverage

(.75% of target market ) x.75 Annual purchase rate (20unites per year) x20

Average offering unite price ($10) x $10

Demand ( or sales) measured $37.5 Millions


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Area Market Potential( cities, states,nations)

1- Marketbuildup Method (To measure areasales potential)

Calls for identifying all the potential buyers in eachmarket and estimating their potential purchases(e.g. wood lathes in an area).

2- Multiple Factor index Method

Used in consumer market .

% of population in area; % of disposable income;% of retail sales are weighted

[0.5(2.5)+0.3(2)+0.2(1.7)]= 2.19 % of the nation


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Estimating Future Demand (Forecasting)


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Qualitative Techniques :

1. Survey of buyers intentions undertaken by marketing researches.


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2. Composite of sales force opinion as they have better

insight on trends in the market.


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3. Expert opinion ( from dealers, distributors, suppliers,

marketing consultants ( Delphi method).


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A) Time Series analysis/ Past Sales Analysis

QuantitativeTechniques

Usage

-Existing of data for a long period provided stability and exclusion of drastic factors

-More convenient for short term forecast


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B) Market testing Method

Usage :

When buyers do not plan their purchases carefully. When experts are not available or reliable

To forecast new product sales in a new distributionchannel or territory.

The new Fried Bologna Biscuit by Hardees

E d

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Ch5 Marketing Research and Market Demand and Forecasting